OpenTensor
Foundation
(OTF)
has
proposed
burning
10%
of
the
Bitttensor
(TAO)
supply
to
stabilize
the
token’s
price
in
response
to
a
recent
exploit
that
led
to
the
loss
of
$8
million
worth
of
the
tokens.
The
decentralized
AI
network
has
put
forward
a
vote
for
users
to
decide
on
the
burn.
Active
voters
participating
in
the
proposal
will
be
rewarded
with
compensatory
DAO
rewards
at
a
later
date.
The
exploit,
which
occurred
on
July
2,
saw
a
Bittensor
user
lose
32,000
TAO
tokens
due
to
a
leaked
private
key.
The
incident
caused
an
immediate
15%
drop
in
TAO’s
price,
hitting
a
six-month
low
of
$227.
The
price
has
since
rebounded
slightly
to
$240.
Attack
timeline
The
attack
timeline
reveals
that
the
incident
began
on
July
2
at
7:06
P.M.
UTC
when
funds
started
being
transferred
out
of
wallets.
OTF
detected
the
abnormal
transfer
volume
and
initiated
a
war
room
by
7:25
P.M.
UTC,
and
by
7:41
P.M.
UTC,
the
team
had
neutralized
the
attack
by
placing
validators
behind
a
firewall
and
activating
safe
mode
to
prevent
nodes
from
connecting
to
the
chain.
During
this
period,
the
network
was
configured
to
only
produce
blocks,
halting
all
transactions
to
prevent
further
losses
and
allowing
time
for
a
thorough
investigation.
The
root
cause
of
the
attack
was
traced
back
to
a
malicious
package
in
the
PyPi
Package
Manager
version
6.12.2,
which
compromised
user
security.
The
package,
posing
as
a
legitimate
Bittensor
package,
contained
code
designed
to
steal
unencrypted
coldkey
details.
When
users
downloaded
this
package
and
decrypted
their
coldkeys,
the
decrypted
bytecode
was
sent
to
a
remote
server
controlled
by
the
attacker.
The
incident
prompted
an
immediate
response
from
the
OTF
team,
which
prioritized
the
security
breach
over
regular
updates
and
maintenance.
The
disruption
has
been
a
significant
test
for
the
network,
highlighting
both
its
vulnerabilities
and
the
resilience
of
its
infrastructure.
Aftermath
Despite
the
severity
of
the
attack,
some
validators,
such
as
RoundTable
21,
confirmed
that
their
delegators’
funds
remained
secure,
emphasizing
that
the
exploit
did
not
impact
all
users
uniformly.
However,
the
decision
to
halt
the
chain
has
led
to
a
debate
within
the
community
about
its
implications
for
Bittensor’s
claim
of
decentralization. Critics
argue
that
the
ability
to
pause
the
chain
contradicts
the
principles
of
a
decentralized
AI
network,
while
supporters
believe
it
was
necessary
to
protect
users’
assets.
OTF
plans
to
gradually
resume
normal
operations
of
the
Bittensor
blockchain,
ensuring
a
safe
and
responsible
approach.
Regular
progress
updates
will
be
provided
to
the
community.
As
a
precaution,
users
who
suspect
their
wallets
were
compromised
are
advised
to
create
new
wallets
and
transfer
their
funds
once
the
blockchain
resumes
normal
operation.
Additionally,
upgrading
to
the
latest
version
of
Bittensor
is
strongly
recommended.
Moving
forward,
Bittensor
will
implement
enhanced
package
verification
processes,
increase
the
frequency
of
security
audits,
adopt
best
practices
in
public
security
policies,
and
improve
monitoring
and
logging
of
package
uploads
and
downloads.
The
proposed
token
burn
and
ongoing
security
enhancements
aim
to
restore
confidence
in
the
TAO
ecosystem.
The
outcome
of
the
vote
will
play
a
crucial
role
in
stabilizing
and
securing
the
network,
with
the
community
eagerly
awaiting
further
updates
from
the
developers.
Mentioned
in
this
article
Go to Source
Author: Assad Jafri
